Tuesday, February 19, 2019

MOS WORKSHOP - Srividya Jandhyala and Himanshu Bhatt - Tuesday, March 12th 2019

The Management Department & The Research Center
Srividya Jandhyala and Himanshu Bhatt
will present their paper

Tuesday, March 12th 2019
   Room N517 – 9:15 a.m in Cergy
4:15 p.m in Singapore

Theme: Political Risk Reversal: Hold-up of governments by firms in 
infrastructure projects ”

Abstract: A central idea in the literature on political risk is that governments opportunistically appropriate returns from firms’ investments. In contrast, we argue that firms are also opportunistic in their interactions with the State. Firms take initially disadvantageous position (vis-à-vis the host government), with the expectation that they can influence government actions ex-post to obtain more favorable investment terms. We illustrate this using the case of aggressive bidding in infrastructure projects and develop a detailed case study of an airport project in India. We extend the analysis to identify institutional characteristics that moderate the effectiveness of aggressive bidding in generating ex-post gains for the firm.